5 megatrends shaping agribusiness

Economic shifts, scarce resources drive advances in food technology

A series of “megatrends” will permanently reshape agribusiness as the world’s producers and industry stakeholders recalibrate to tackle the challenges of feeding 9 billion people in 2050, reports Christopher Nolan Sr., managing director at global professional services firm PricewaterhouseCoopers L.L.C. (PwC).

A megatrend, as defined by Nolan, is a proven macroeconomic force backed by science and data that ultimately shape society. Based on discussions with its clients, industry leaders and politicians, PwC “megatrends” share common characteristics:

Significant, consistent impact across all geographies

Measurable, universal impact across all societies

Long-term, lasting impact

An economic impact measurable in trillions of dollars

With this in mind, Nolan outlines the key macroeconomic trends that will shape both the world and agribusiness over the next few decades.

PwC’s top five global megatrends

1. Demographic shifts

Population growth is a given; however, the buying power of a growing global middle class qualifies as a megatrend.

PwC defines “middle class” as earning enough to include more protein in their diet, consuming more calories than those classified as lower class.

“The rising need for food will increase faster than the rate of growth of the global population,” Nolan states.

The global population is set to increase by 18 percent by 2050, “but the projected increase in global food consumption is expected to grow by 35 percent,” he reports.

Meanwhile, the economies of frontier countries (F7 = Colombia, Peru, Bangladesh, Vietnam, Philippines, Morocco, Nigeria) are growing rapidly — with forecasts pointing to 30 percent growth over the next five years.

“The economic power of these economies will drive investment in agribusiness as local governments focus on being able to feed their citizens,” Nolan says. “Food-consuming nations — those who do not produce enough and have to consume product produced outside their country — will pursue investments in food-producing nations to better control the food value chain.”

3. Accelerating urbanization

For the first time ever, more than 50 percent of the world’s population lives in cities.

“Today there are 30 megacities — those with populations over 10 million — and the number is expected to double,” he says. “If some of these cities were stand-alone countries, they would rank in the top 50 most populated nations.”

The vast majority of global population will live in urban areas by 2030. In China, for example, an additional 300 million people will move to cities. To put this in perspective, that’s equivalent to the relocation of the entire population of the United States. Such change will require new means of agricultural production and distribution to deliver food into city centers.

4. Resource scarcity

In order to feed a global population of 8.3 billion, the world will require 50 percent more energy, 40 percent more water and 35 percent more food.